Junk Health Insurance

It might seem to be health insurance, if you don’t look too
closely, and most people don’t. The premiums are surprisingly affordable.
Many unemployed people, service industry workers, and others are taken-in
by fast-talking telemarketers to sign up.

8 signs the plan
you are pitched might be junk

Vague, generic-sounding names
Fixed-benefit indemnity and discount card plans are often sold under
generic-sounding names like USHealth Group, Health Care One, and Allied
Health Benefits. When in doubt, check with your state’s insurance
department or the agency that regulates insurance companies in your
state, such as the State Corporation Commission, Bureau of Insurance, in
the state of Virginia.

A required membership in an association you’ve never heard
of
Reputable associations, such as business associations or professional
groups, can and do arrange for major medical insurance for their members.
However, the “association” you’re asked to join as a condition of
buying a junk plan may exist mainly to sell you insurance, not for any
other reason, and a significant portion of your monthly payment may be
going to the association, not toward your actual policy benefits.

Guaranteed acceptance
Actual health insurance companies can continue to turn away people with
pre-existing conditions for individual plans until 2014.

A bargain-basement premium
There are no bargains in health insurance. A plan generous enough to
cover the policyholder’s medical needs has to collect enough money to do
that. The only safe way to lower your premium is to get a plan with a
higher deductible.

“Not major medical”
If you see that phrase, the policy is not comprehensive health
insurance.

Discounts of “up to” a certain amount
An actual insurance coverage policy often pays a substantial percentage
of your bill, often 80 percent. Marketers will toss around percentage
terms to make you think that’s what you’re getting with a discount card.
You’re not.

No deductible
Junk marketers know consumers hate deductibles, so this promise goes up
front. They don’t tell you that their maximum payout tops out at only a
few thousand dollars.

It’s marketed as “Obamacare”
Many are still unsure about the provisions of the health reform law.
Marketers take advantage of that by using pictures of the American flag
or the White House to suggest their plans are the “affordable care”
promised by the new law. Those come into effect in 2014.

Avoid pitfalls when buying insurance on your own

Don’t shop from a search engine
If you Google “affordable health insurance,” you’ll see sites that
promise instant quotes. Stay away from them. It’s impossible to tell
which ones are legitimate, and you run the risk of getting a call from a
telemarketer pushing junk insurance.

Look up real plans at Healthcare.gov
On this federal website you can search for all legitimate licensed
health plans sold to individuals in your state, but you can’t buy a plan
directly from the site.

Consult a licensed independent broker
A broker can handle plans from multiple reputable carriers; walk you
through the plan options and pricing, and may be able to find you
coverage even if you have certain pre-existing conditions. Your auto and
homeowners insurance broker might also offer health insurance, and ask
friends and relatives for recommendations.

Check with your state insurance department
Most state insurance department websites have a guide that explains
which major medical plans are licensed by the state, and 26 states now
have federally funded consumer assistance programs. In Virginia, you can
check licensees at the Department of Professional and Occupation
Regulation or visit Healthcare.gov and search “consumer health.”.

Make sure everything’s covered
Before health reform goes into effect in 2014, insurers can sell plans
that don’t cover some basic medical services. Many plans don’t cover
prescription drugs, or cover only generics. (Generics are a great way to
save money, but some costly drugs come only in branded versions).

Find out whether your group plan is a mini-med
The government requires all mini-meds with waivers to include a
disclaimer. Example: “Your health coverage … does not meet the minimum
standards required by the Affordable Care Act.”

Know your COBRA rights
If you leave your job and your workplace has 20 or more employees, the
federal COBRA law entitles you and your dependents to stay on your group
plan for up to 18 months (or more in certain situations) so long as you
pay the full premium yourself, which can be costly. To learn more about
COBRA’s provisions, which can be complex, go to the Department of Labor’s
website, at www.dol.gov,
and type “Cobra” into the search box. Many states have “mini-COBRA” laws
protecting employees of smaller companies.